Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
The caption indicates it does not involve the WMI bankruptcy.
If the FDIC has named JPMC as a nominal cross-defendant (i.e. seeks no substantive relief against JPMC) in an attempt to bypass any adverse ruling on JPMC's request for intervention, I would think this will upset the district court judge, and I am sure WMI will move to dismiss for improper joinder. But if JPMC was only made a nominal cross-defendant, does the FDIC attorney realize by doing so he may have waived any and all other counterclaims the FDIC may have had against JPMC? Unless good excuse is shown you have to file all your claims at the same time otherwise those claims are waived. That is why WMI threw everything in on its initial claim against the fdic. If anyone can link the counterclaim I will review and comment further. But the fact that JPMC has been made a party this way isn't going to change Walrath's outlook on the 2004 discovery, etc.
One has to ask, if the FDIC's Motion To Dismiss in the district court has not yet been ruled on, why would the FDIC sue JPM before a decision was rendered? Prior to this the FDIC merely joined JPM in their effort to intervene in the district court and I posted that all the fdic had to do was sue JPM if they wanted JPM involved. I don't recall the motion to intervene being ruled upon. So obviously something has changed...either the FDIC has to sue JPM to pony up some cash, or the settlement is near and in order to facilitate settlement they made JPM a party.
Note footnote at bottom of page 2 of reply, states JPMC was formally added as a party on July 13th in dc action.
Psst! Just read the "Response of JPM to NOteholders" in the bankruptcy case (link over on yahoo board posted by Tyson) In the first paragraph page 3 Jpm states "The FDIC has since named JPMC as a defendant in the D.C. Action. WMI is the plaintiff and the one who names defedants... so what I think this means is FDIC named JPMC as a cross defendant which means the fdic has sued jpmc. good news imho. Response is dated 7/22
I think you missed my point. The fdic in its memorandum of law has alluded that it has this contractuarl right to claim part of the 4 billion, but to date has not even made a claim or sued for it. What judge would rule in the fdic's favor, if the fdic doesn't even take the time to make a formal claim. What one might do doesn't get any weight from a judge.
With respect to the motion to dismiss filed by the fdic in the district court action, it is apparent that the motion to dismiss cannot be granted and the case will go forward requiring the fdic to answer the claims. Even if the judge was in the back pocket of the fdic so to speak, if he grants the motion agreeing there is no claim for not receiving fair value, then by doing so the receivership statute itself would have to be declared unconstitutional because it allows a taking without just compensation.
Huh? Unless JPM/FDIC comes up with a factual dispute the motion for summary judgment will be granted. In order to defeat the motion, mere allegations of fact are insufficient to defeat the motion. JPM/FDIC must submit counter affidavits to those submitted with the motion by the holding company. Affidavits of people who have first hand knowledge. Now JPM/FDIC may try to ask to depose those people who made the affidavits but this shouldn't be much of a delay if it occurs. JPM and FDIC cannot even pay off someone to submit an affidavit to substantiate their claim of fraud that the money was transferred fraudulently because WMI knew the seizure was coming. How can you prove the holding company knew a future event was going to definitely happen? You can't. There really isn't even a factual dispute as to what amount the fdic may be entitled to of the 4 billion, because the fdic still hasn't made any formal claim over it.
>Judge Walrath can not and will not be able to make the decision on the 4.4 Bil in deposit accounts until she is certain by way of BK Rule 2004 (legal discovery) that the money belongs to WMI. She knows JPM/FDIC lawyers are chomping at the bit to overturn her decisions in appeals court and that all bases have to be covered. Discovery will prove the source of the money, give it time and be assured when she makes the decision, she is making in light of all evidence seized by her regulators. Subpeona's went out last week, give it some time, people close to the case will keep us informed.
Yes. And to make Dimon sweat bullets.
Recovery by the holding company under the bankruptcy code is not dependent on proof of any conspiracy. The 2004 discovery may lead to evidence of a conspiracy and the filing of additional claims by the holding company in the future, but most of the holding company's bankruptcy claims are based on provisions of the statute that just require a showing of when the transfer was made and/or that fair value was not received. The texas action is the case alleging a conspiracy and the holding company is not a party to it, the bond holders are the plaintiffs. So the texas action is the only thing he can be talking about.
Don't worry, he was talking about the Texas action. He didn't say a word about the holding company's right to recover under various sections of the bankruptcy code which for the most part are ironclad. I would hate to be the attorney who has to sit by this man during his deposition.
JPM lost the very first day they filed their adversary proceeding in the bankruptcy court. JPM's lawyers just figured this out.
It depends on who the owners of the preferreds are and whether or not those making the settlement decisions want to reward/ take care of them. In my view the terms of the settlement agreement trump the preference terms.
Yes, I am , for twenty six years. I said in a prior post my reasonable expectation is $4.00 for the commons via settlement.
JPM filed an interpleader action. It is bound by its pleadings even though the interpleader may now be stayed. Should the judge order the turnover, JPM and its officers will face serious contempt charges. Even should JPM be allowed to appeal such an order, the holding company can move that as a condition of the appeal a bond or the money be put in the registry of the court pending the appeal. As I said before, such an order requiring JPM to turn over the money costs JPM one hell of a bargaining chip in the settlement negotiation process.
Its not just delay tactics. It is desperation tactics. JPM has probably told the attorneys to get JPM out of this mess (the discovery in particular) or lose JPM as a client. Attorneys should refrain from pxssing off any judge. If the judge thought her decision was a close call she could have made it a final order so JPM could have appealed without a motion. She didn't. That says a lot. She will probably deny the motion forthwith. Judges are arrogant sob's. They don't like to be told what to do or that they did wrong. Who wants to be reviewed? If she denies the motion, the case moves forward and perhaps settled with no appeal whatsoever. Its actually in her best interest to deny the motion. Doing so only delays the appeal . In the event it goes to trial to final adjudication JPM can then appeal it. I am glad to see the holding company going after sanctions.
Biz all I said was "With respect to the summary judgment motion, JPM has already shown its hand as to what its response is going to be in its answer to the Turnover Action. JPM alleges fraud surrounding the transfer on the premise that WMI knew Wamu was going to be seized and put the money out of harms way in the holding company's name. Well JPM might have known Wamu was going to be seized, but it is going to be impossible to prove Wamu knew it was coming, especially since Tarp was about to be given birth to be every banks savior. It is easy to allege something, quite another thing to prove it. To defeat the holding company's summary judgment JPM has to do more than allege this fraud, it must produce facts of the fraud by affidavit of someone with first hand knowledge. I don't think they have anybody. Don't see how they could have anybody. And one further note, all their (JPM's) affirmative defenses do not hold water."
With respect to the summary judgment motion, JPM has already shown its hand as to what its response is going to be in its answer to the Turnover Action. JPM alleges fraud surrounding the transfer on the premise that WMI knew Wamu was going to be seized and put the money out of harms way in the holding company's name. Well JPM might have known Wamu was going to be seized, but it is going to be impossible to prove Wamu knew it was coming, especially since Tarp was about to be given birth to be every banks savior. It is easy to allege something, quite another thing to prove it. To defeat the holding company's summary judgment JPM has to do more than allege this fraud, it must produce facts of the fraud by affidavit of someone with first hand knowledge. I don't think they have anybody. Don't see how they could have anybody. And one further note, all their (JPM's) affirmative defenses do not hold water.
Yes I currently own a lot of wamuq. I have stated in the past that I do not view the commons as riskier than the P's, k's , etc. as do others.
Well if she signed off on an order at the bench, it would have been obvious that she decided before hearing oral arguments, which would make it obvious that she made the lawyers do a song and dance for nothing today. She can enter an order anytime now.
With respect to the judge's statement that she would rule on the turnover action an appeal has been threatened of a judicial order not yet made. There is no appeal yet. Moreover, if the judge does not certify her order paving the way for an immediate appeal, the fdic and jpm will have to wait to appeal. As to the fdic's claim over the 4.4 billion, the fdic claims that their contract of sale of the seized wamu assets to JPM gives them the right to withold the payment of any deposits sold to JPM particularly the holding company's deposit. The fdic gives the excuse that certain tax refunds were commingled with those monies an amount which is only in the millions and which can easily be set aside to protect fdic's yet to be determined interest therein. So imho, fdic's claim is not substantial enough to forestall the turnover of the 4 billion to the bankruptcy estate.
I don't have access to her stay order so do not know. My guess is the district court will make certain decisions that will eventually be determinative and binding on related issues in the bankruptcy case...i.e. res judicata. But there may be appeals before anything is certain as is to what is res judicata. And I think weil has hinted that by summarily dismissing the holding company's receivership claim...the district court may just throw it back to the admistrative review level first with instructions that the fdic has no jusisdiction over holding company assets. If there is any case ever that needs to be settled in the best interests of everyone involved, it is this one.
forgot to mention that jpm also invoked the jurisdiction of the bankruptcy court to decide the issue by filing an interpleader action in the adversary proceeding over the 4 billion. I would hate to be the lawyer representing JPM on such an appeal...will look like a retard.
If JPM doesn't appeal it has to obey the bankruptcy judge's order/instructions to turnover the money to the registry of the court or the holding company. The fact that the fdic appeals doesn't excuse JPM from following the order, and if JPM appeals the holding company can probably make them post a 4 billion bond to proceed with the appeal. But who cares about an appeal....JPM STIPULATED that the 4 billion was the holding company's. Frivolous appeal imho.
I guess its the same reason why the market fails to account for the fact that the listed assets in bankruptcy are at book value meaning assets are in reality greater than liabilities.
People do not understand or remember. The holding company sued in the district court solely against the fdic. JPM then filed the adversary suit in the bankruptcy case . The holding company bypassed the adversary proceeding and filed the Turnover action which is independent of the adversary proceeding. THe adversary proceeding is now stayed. Seems to me this is exactly what the holding company lawyers wanted to happen.
In order for her to have decided she has jurisdiction to rule on the summary judgment she had to first determine the 4 billion was indeed an asset of the estate . So imho this tells me she is/will be ruling the 4 billion is to be turned over to the holding company. Otherwise, she would have just stayed the turnover action as well. So if JPM doesn't settle quick, it loses a big 4 billion bargaining chip going forward.
Carlyle Group. Hmmm. George Herbert Walker Bush is involved in Carlyle. And lets see Stifel Nicolaus & Co became involved as a market maker in the P's a short time ago. Anyone else aware that the cousin of George with the last name of Walker owned owns a big part of Stifel? Very interesting.
And don't forget JPM has filed an interpleader action in the adversary proceeding over the money. This puts the 4 billion squarely within the jurisdiction of the bankruptcy court.If anything was comingled the amount can be determined, and the bankruptcy judge can easily draft an order to protect the interests of the fdic. Remember the holding company bypassed the interpleader action and filed a different action the "Turnover Action" on the belief that there is no LEGITIMATE dispute that warrants the interpleader action and filed a summary judgment motion for that turnover action. If the summary judgment is not granted, by no means is anything settled with respect to who owns the 4 billion...it just gets litigated. In a prayer for relief, lawyers always include the phrase and "for such other and further relief as the court deems just". So even if the summary judgment is not granted we could see an order instructing JPM to put the 4 billion into the registry of the court.
The summary judgment(s) basically show that the issues involved are straightforward. The facts are what they are...i.e. the documents establishing ownership are straightforward and unambiguous...and the law is clear and merely needs to be applied to the undisputed facts. Even where a jury has been demanded, for example the trademark infringement, it is/will be undisputed that the trademark is owned by WMI, that it was infringed, all the jury will need to decide is the actual and punitive damages after considering the expert testimony.
You are exactly right. That was the beauty of the turnover action. If the fdic and jpm has no legitimate dispute over the 4 billion, then the turnover action will not be dismissed and if jpm does not come up with any affidavits to counter the summary judgment, then the judge will have to grant summary judgment. And the granting of the summary judgment indirectly decides or ends JPM's interpleader action...makes it moot. I said months ago what the holding company just said in its filings. JPM filed the adversary proceeding trying to put itself ahead of other creditors. JPM wants to be the owner of the asset not a mere creditor who has to share with other creditors. And I think the judge sees this. If she rules in the holding company's favor, she knows a settlement will happen quicker and at the same time she is looking out for all the creditors interest in that money. She isn't going to allow the holding company to do much than move the money out of JPM. But if she rules in JPM;s or fdic's favor, she prolongs the case to the detriment of the creditors. The fdic imho has to be pretty worried about the bankruptcy judge since the fdic is asking for a stay. And by the way, I am rather impressed with you posts...I think you have a rather good understanding of the facts and the law.
In my professional opinion, fdic's filing helps the holding company's position and forces the fdic's hand to sue JPM and vice versa much sooner now. Your post indicates that you have no understanding of bankruptcy law, ancillary proceedings therein and the automatic stay.
The fdic was given the right to administratively review its receivership of seized ( Wamu) bank assets. The fdic's decision is then appealable in the district court. So if the district court would find that the 4 billion is the holding company's the district courts decision would then state that the fdic had no jurisdiction to decide anything relating to the 4 billion i.e. holding company's asset. So basically, a decision has to be made as to who owns the 4 billion in deposits before any court can determine if it has jurisdiction. SO the fdic did have the right to administratively determine whether it sold Wamu bank for fair value, but the district court can determine otherwise and overrule the fdic.
I completely understand the fdic filing. I do not accept their characterization of things , which apparently you do. Just because the fdic asserts something doesn't make it true. JPM filed an interpleader action for the deposit in an adversary proceeding within the bankruptcy case on the theory that there is a dispute over the deposits even though up to that point the fdic never made claim to it. The holding company ignored the interpleader basically, and said there is no LEGITIMATE DISPUTE and refused to fall into JPM's strategy for the case and filed a completely different action,,, the turnover action. The fdic is now trying to say that the district court action filed against the fdic by the holding company is the initial proceeding. But if there is any claim filed therein for the deposit, it was really filed only by the holding company to ensure that it would not inadvertently waive its claim. I believe weil was of the opinion that with regard to any holding company assets weil could have also gone after the fdic via an adversary turnover action within bankruptcy. They filed the district court action because the fdic told them they had to and it guarantees that the holding company's claims would not be waived due to the limitation period. The fdic in my view is saying we can wrongfully take the holding company's property without any statutory authority and deprive the holding company of its rights in bankruptcy since they tried to protect their claims by filing in the district court. I say the bankruptcy court, is going to be very territorial, and say hogwash, the fdic did wrong, and I decide.
P.S. a petition is a complaint and a complaint is a petition. When the petition for bankruptcy was filed all claims against the estate, all assets of the estate are within the bankruptcy's jurisdiction in regard to holding company assets. All the holding company is doing is claiming an asset which either was theirs as of the date of bankruptcy or was not. The fdic receivership happened a day before, but we are not talking about a receivership asset. Jurisdictional issues always trump "procedural" issues. This is kind of like a case on appeal where the premise of the lower court is that it had jurisdiction to rule, but the appellate court finds the trial court didn't have jurisdiction, so can't decide anything on appeal other than to tell the lower court it didn't have jurisdiction.
In order to decide the "procedural" aspect one must first decide the jurisdictional aspect. The fdic asserts that the filing of the holding company claim within the fdic receivership was the initial proceeding. Perhaps not. Maybe the bankruptcy filing itself will be determined to be the initial proceeding. If the deposits are determined to be the assets of the holding company, the automatic stay was in force at all times over those deposits. The fdic could not even trigger the p and a clause it now cites, because those deposits were under the automatic stay. In its fdic claim, weil even stated it was filing the claim without prejudice as to its claim as a depositor of jpm. So I would expect the holding company will argue this point. IF the bankruptcy judge sees it as an asset of the holding company from day one, the bankruptcy court had jurisdiction first.
The jurisdictional claim doesn't hold water. The holding company is not seeking a determination of rights with respect to the assets of any failed institution. The asset was of the holding company which is not a failed institution. The holding company is not asserting a claim relating to any act or omission of the failed institution or the fdic as receiver either... the holding company is merely asserting that it has a claim against jpm as one of jpm's depositors. The holding company said it best, JPM is trying to create a dispute where there is no legitimate dispute...and jpm must have a legitimate dispute by law. JMHO
It is a futile attempt to pull the wool over the bankruptcy judge's eyes. The fdic does not have jurisdiction over the holding company or its assets other than those belonging to the failed bank. The bankruptcy judge has jurisdiction over the holding company's assets, and neither the fdic nor jpm have come forth with any facts to dispute the fact that the holding company is the rightful owner of the 4 billion in deposits. Read the holding company's response to jpm's arguments against the motion for summary judgment. Also, the texas case response to fdic arguments indicates that many of the fdic assertions are not supported by the law. Bottom line is what choice does the bankruptcy judge have...the 4 billion is clearly the holding company's , the holding company has shown that jpm has no LEGITIMATE dispute over the 4 billion, and the bankrutpcy judge has the jurisdiction to rule and the duty to protect the estate assets.
fsshon. WMI responded to JPM's arguments in its Brief in Support of WMI's Motion for Summary Judgment. Go to hfields post 73137 and click on the link, then go to the bottom of that link and look at the link for the pdf file for WMI's brief. WMI answers this with a plausible explanation at page 8-11 of the pdf file itself, or page 4 - 7 of the brief itself.
Read the summary judgment of the holding company. It explains why JPM argument is meritless. Actual money did not have to be deposited into the account to create the deposit between subsidiary and parent.